miss my conversation with goldman sachs. as we go to the european equity market, commodities are still front and center. the slump on producers in asia yesterday. european stocks impacted. they dropped with the biggest slide in more than a week. what will we see today? a look at the european equities across the board. ftse 100 slid best pretty -- pretty flat at the moment. still waiting for the dax to open. well comeeaker as down by two tests of what percent. those commodities are still putting pressure on the stoxx here in europe. speaking of which, let's take a quick check of these. starting with the oil price come both wti and rent are rebounding there.

wti is above $42 a barrel. that could be off of the back of the comments from saudi arabia. they are committed to working with opec members and other producers to stabilize the crude market. you are come at three tons of a percent. copper and nickel were hit most earlier this morning. let's take a quick check of the stocks moving today. bhp billiton, the world's biggest mining company drop to a 10 year low in sydney trading. down 1% in london. we heard today on standard & poor's that this company may face a one notch downgrade to its credit rating in the next 12 months. volkswagen, could be a bit of good news. they signed a program because they have had approval to repair most of their rate european edges. they also made a deal with u.s. regulators to resubmit some questionable software. rolls-royce down seven to the

1%. we know that after the profit were this company gave earlier this month, the stock took a battering. update, the an company is saying they will change or restructure to cut 2017 on words.m changes could be painful in the near term but the long-term outlook is positive. the stock is up by two dozen 1%. jonathon: a couple of minutes into the session. the ftse 100 off by 4/10 of 1% and the dax down by a third. a choppy session in asia. yvonne: next picture in the asian market today. following the call on wall street. not too much action as the u.s. has into the thanks during holiday. volume is light. mining stocks are driving down the declines in the region today. continues totals

bring bad news. japan returning after a holiday. the cost be also up six cents at 1%. australia, after a five-day climb from the treasury has lowered its potential gdp growth to 2.75% as the population slows. we are seeing the shanghai market ending the day reversing course. almost two death of 1% up. sources tell us that china has canceled a role requiring brokerages -- in the proprietary trade accounts. the asian stock markets seem to a stabilized after the summer slot. -- the summer slump. the largest brokerage by revenue. the ceo chairman was nowhere to be the since wednesday. the shanghai securities regulator has sent an inspector

to 14 state owned enterprises motor's andic shanghai electric. they are rebounding a bit. that is what is happening in markets across the world. up, homegrown demands from a german gdp expands on domestic consumption but exports slow. we breakdown the outlook for europe with goal and sex. overpaid. deutsche bank said his staff earned too much to do too little. clinton criticizes the $160 billion merger that would move pfizer's headquarters to ireland. first of all, to europe's data. germany releases the sentiment

data for november at 9:00 a.m. u.k. time. first of all, this morning's final gdp reading shows the german economy expanded by 0.3% in the third quarter. hans nichols over in berlin with more. the breakdown between what is happening domestically and abroad. hans: confirmation of what we have gotten in the preliminary. 0.3% during the of the details. up domestic demand. private spending up 0.6%. thatxports, for an economy is an export machine, it is only up 0.2% and that could be a warning sign. we also saw, on capital expenditure, going down 0.3%. not much more investment. it is not economically difficult to understand. low and -- low unemployment. strong dollar and a week euro. is driving this.

heading into the christmas season. onwill get some estimates how much the average german expense on the christmas season at it is an indication that this recovery is being driven by the demand side. for an economy that is outward looking, that is not positive. little, they are a better than expected. in about an hour and a half, we will get the reading. that reading will give us a sense of both current expectations and the current estimate. ipectations are the one that like. it is expected to come in at 104 80. it is a pretty strong number. that survey bouncing up and down and going down pretty far. it is more about market sentiment. it lets you know what manufacturers across europe are thinking. we will take a look at that and get to those numbers. let's continue this

conversation and bring in kevin daly, goldman sachs is senior european economist. he is forecasting eurozone growth of 1.5%-2% growth. great to have you with us. four tailwinds. it is on the screen for our viewers. qe. credit conditions easing. fiscal policy will loosen also. to go through each one point by point, all of this, german gdp and everything counts, it does not scream a need for more qe. >> the growth picture is resilient. , 45% fromoil prices the 2014 average. 1.5% the level of gdp with the boost coming through for the most part coming around the turn of the year.

the week euro at another half percent. with the boost comes in around the turn of the year. easier domestic financial conditions. we are seeing an easing in credit to the periphery of europe where it was tightest last. it is seeing an easing and policy. easier fiscal policy. the ground -- the growth outlook is definitely better. is focused on the inflation outlook and given the renewed weakness of oil prices and the risk from asia, they are responding to that rather than the growth picture. jonathon: a narrow focus on asia. -- a narrow focus on inflation. >> they would not be doing their job if they did not focus on that. they are often criticized for not focusing on up on the growth when it is week. the outlook is week. core inflation is around 1%.

with the renewed weakness of oil around inflation is down zero and there is little prospect in the near term with inflation rising back to the ecb targets. jonathon: let's bring out the economist in you, the money illusion. the idea that normal increases in wages is somehow better for us. the need that you need to see real, big nominal increases in wages. low inflation can become embedded and there are negative consequences very best consequences. >> the money illusion is a real thing. that is not to say that you necessarily need normal growth. one of the biggest boost of those four factors that i mentioned, the biggest one, and

you can see it in the data, is from low oil prices. and that is exclusively a boost from lower inflation into real income. the illusion is real. it is not preventing stronger real income from low inflation boosting growth as well. jonathon: weaker euro. lower energy. more qe.-- loser fiscal policy. where you seeing that? policyially, a fiscal was very damaging for growth in 2011 and 2012 in particular. it turned more neutral recently in our estimate aced on the published lance submitted -- submitted to the european commission. the boost will be around a third of a percent.

crucially, that was before the security measures, before the terrorist attack in paris. there is likely to be additional fiscal loosening on the back of that. we are seeing some loosening in the periphery. in germany. and now in france, some loosening there as well. jonathon: how temporary is all of this? thatlls off in your fact forecast of 2017. >> that is the crucial question. we are seeing a lot of factors that are fueling growth at the moment. they will provide a big boost through the early half of 2016 in particular. euro area has a self-sustaining recovery and whether growth can continue to carry on after tom is a crucial question of policy. our estimate is that it will but

it is the biggest unknown. jonathon: december 3. what are you expecting? --we have a 10 basis point we have an extension of qe by an additional year which implies additional 500 billion -- jonathon: great to have you with us this morning. up next, bankers are paid too much says the ceo of deutsche bank. we will break it down. i am sure that everyone in the city wants to hear that. we are live from franklin after this short break. ♪

jonathon: good morning, welcome back to bloomberg tv. i am jonathan ferro. a pullback in lending. ftse gone by 6/10 of 1%. that is the top line in the market. brussels has extended its highest level terror alert into next week warning higher terror plans to attack highly populated areas. the 16 people arrested has been charged in connection with the attacks in paris. meanwhile, the french president travels to washington to meet with u.s. president obama. he is pushing to knit together a coalition to tackle isis that includes u.s. and russia. the u.s. has refused military cooperation with russia.

raised its stake in dahlia and pharmaceuticals to 9.9% in a series of transactions darting in october. the move underlined his commitment to battle the drugmaker. do you think that bankers still aren't too much? deutsche bank ceo still think so. sectorsa swipe at the compensation structure and went on to say that too many people have senior titles. german finance reporter is in frankfurt for it. nicholas, what is going to be the effect of all of this? what does this do to morale at thatche bank as the guys work at this institution wake up and read those headlights. immediate effect is justification for his and announced plans to overhaul the compensation program as well as

to make sure that staff share in thepain of paying down fines were past misconduct. not just the shareholders. going a few steps further, you could argue that this is part of his did to transform the company. on the one hand, he will be cutting jobs across the businesses. if some people leave the bank as a consequence of saying that that might pay prospects are elsewhere and then he gets rid of that staff. the ethics opponent. -- component. the flip side, and the real risk or gamble here is whether he uses key moneymakers, he people who bring in the revenue to deutsche bank and they lose market share more than they were ready to do so because they have intellectual capital and talent

walking out the door. that is the fine balance he will be walking. a big thanks for breaking down that story for us. do you hold deutsche bank stock? are these the kinds of issues that you want to see debated if you want to invest in deutsche bank or would you rather that this did not happen publicly? >> i agree with you partly that it should not happen publicly but if you're looking from a shareholders point of you, and you see the focus is on cost cutting -- that that is oppressive. the flip side, as your reporter mentioned, if you have key people leaving, deutsche bank will have to go over the top to bring do people in. it should not be done behind the

back but let us see the motivation of the ceo with these comments. a change when you have in the compensation stroke -- structure, the idea is that you boost the pay. and you can look at the very able pay. that is a legacy of the financial crisis. he is calling people out for bonuses. is that the correct approach? >> i cannot comment on his personal views. tradersook at how the take risk and you are getting paid based on that, but the key rings to look at our qiagen -- risk adjustment. if you are really taking risks, you have to be on the right side. jonathon: if you're sitting at deutsche bank at the moment, i this does not

bother me because i can get better talents. i think it is already happening. and has happened. a lot of people have moved. money whereng your your mouth is. icon -- carl icon -- it was too big to succeed. likeyou get to a size deutsche bank and you are in the public spotlight and the gallery your ceo is paying to is not just your investors, but also society. is that the point that you are too big to succeed because you cannot make the decisions that you really want to make? >> it is too big to understand. some ofan investor --

these banks have become too big to understand in terms of analyzing them. i am looking at more fewer retail. jonathon: we will get to those banks in just a moment. he will stay with us. morning movers including the odds of a big fed rate hike in december. more than 70%. ♪

jonathon: good morning and

welcome back to on the move. i am jonathan ferro. here are your top stop stories. >> volkswagen. it has received approval for repairing most of its rigged diesel and its. it is also made a deal with u.s. regulators teresa met questionable software for review. the stock rally today. the biggest game. the ceo also said that the cost and complexity of the fixes are manageable. full year results will be in line with expectations. a record level and announced a 10% increase in the interim dividend. stoxx 600. kingfisher is one of the big losers. the home-improvement retailer. third-quarter earnings missed estimates as sales fell. the morning stock movers.

let us get to another morning movers. the fed rate hike in december climbed to 74% according to futures contracts. increasingly, it has been -- you see that at the front end and the investment thinks it is going to the banks because in a timely cycle the yield curve gets steeper. it is getting flatter. ati would say if you look at what the fed is going to do, likely increase the interest. and fix the flow. the banks will make slightly more money than they make now. underliningat the data. 14% of the u.s. gdp is manufacturing. 86% is services. the services pmi is really doing well.

there have been signs in the market data that there will be pressure part if you come back to the inflation story once again cap the curve is going to steep out. jonathon: 40 seconds. how short will this timing cycle be? how short will this one be? you look at what has happened in six other countries, including new zealand, 16 months. if gdp growth is not going to be as exciting as before, we come to a point where they have gone too far, there may be easing again. it could be a short cycle. jonathon: great to have you with us. of next, the commodity credit shows no sign of abating. we look ahead to the next meeting next week. ♪

jonathon: good morning this is bloomberg television. we are 30 minutes into the session. blanket right across europe. ftse 100 down by a 10th of 1%. frankfurthe benchmark. the fx market, the move on dollar come lira, the turkish lira is weaker this morning. >> this is what we are hearing from the turkish press that turkey jets down a plane over syria. this is one of the turkish press sightings on these sources. what we heard from the turkish press is that turkey's didn't take steps with nato and the

yuan after the jet incident. really think we have from official sources is that turkey is to raise this syria border with nato and the u.s.. we have also heard from hd that turkish forces warned the jet before shooting it down. much a moving story and we are waiting for more official confirmation. the turkish lira weakening against the dollar. i have the chart here. this is the spike, the dollar strengthening almost 3/10 of 1% against the lira. jonathon: much more detail when we have it. do stay with us. elsewhere in the markets, the commodity credit continued in the last 24 hours. copper falling to a fresh six-year low. nickel, back to 2003. near aomberg index, seven-year low. ryan chilcote is here to break it all down and talk with through the numbers. ryan: the index is right near a 16 year low.

back to 1999 to see the prices we are seeing right now for all of the commodities that we track. take a look at copper. just below 4500 bucks a metric. nickel is at a 12 year low. the last few hours, we have seen some pullback in terms of the industrial metals, whether it be copper, nickel, or platinum. atigroup said platinum may be buy, some concern about catalytic converters on the back of the vw scandal maybe overstated and there may be value in platinum prices. also, in the next few hours, the hp billiton, the world's biggest miner, was showing weakness in trading in australia. it may have to downgrade its credit rating by one notch sometime over the next year depending on how the world biggest miner response to decreasing iron ore prices. some pullback when it comes to

commodities. overall, the big picture, and this has been the same for the whole year, is it is pretty ugly out there on the back of a strong dollar and as ever, the concerns about chinese demand. jonathon: that is predominately the mental story. the energy story. a goes to show how sensitive some of the shorts are. we had one headline from the saudi -- the headline seen before was the idea that their work with opec and non-opec producers to stabilize the market. i wonder what that actually means. higher prices or stabilizing to around 40? we didn't see the pop in the price of oil yesterday on the back of the saudi government saying that yesterday, one week after he said exactly the same thing. the market has set the price of oil down. it is discounting that.

he may be playing nice. we surveyed 30 analysts and market players and asked them what they thought opec would do the secondathers in half of next week. all 30 of the 30 said opec will do nothing. the production target will be left alone. no production cut. the reason for that is that they think and many believe that the saudi strategy is working. despite the fact that we have a oil glutgns that this out there is persisting, in the long run, the saudi strategy should work. the endless we have spoken with unanimously believe that the saudi's will get their way come the end of next week and we will see opec continuing to produce oil like there is no tomorrow. more pressure on prices despite the fact that we are near that $40 level. you even have the venezuelan oil minister saying that is opec does not do anything, and he does not expect to be hurt or anyone to take action on his ingestion, we could he brent go

as low as $20 a barrel. the big story for the end of next week. he helps oversee about $2 billion in assets. talk about.thing to iron ore battered over the last 12 months. the oil price virtually have -- halved. the miners come down 25%. the energy majors, they are flat. ftt is happening between the market and the equities that represent -- prices move much more quickly. especially when you look at what i amnd others -- saying is that the market works very differently.

you could be seeing an effect of that. my view is that it will continue. china -- if is will -- unless you see the consumption or the internal growth that should be happening and european economies. jonathon: that is a cyclical story. i want to talk about a structural story. five years ago, if we had an honest conversation, and i told you about climate change in your portfolio, it is likely that you would laugh. anz -- that is a huge asset manager. you have to start looking at the miners differently. that this company is bringing this up is a prudent

point and probably important for all investors to look at. we do not have any gold stock in our portfolio. it is a valid point. jonathon: the chief investment officer and anyone that manages capital, i what are how you look at the energy situation and the mining? actuation there is a structural situation. you cannotbecause trust the global economic cycle. if manufacturing, -- it will have an impact on the sentiment of the market. a cyclical story is going on. if you look at europe, and saw the german numbers are the consumption number is better.

the exports are weaker. you will not have bundesbank opposition to receiving more qe. i am looking at health care, technology, and financial. if you take out some of the energy and mining -- they are doing pretty well. would say isng i that the euro-dollar is becoming an interesting very not least because you are seeing a policy to versus. i do believe the dollar will touch parity. not stay there. it will rebound. when you look at what mr. draghi said recently, he then we have to get inflation of his ugly as possible. he is really worried about this area and continuing slack in the economy. jonathon: you said almost the exact same thing 12 months ago so maybe it is a sign of more to come. >> he did say the same thing. jonathon: great to have you with us.

next, they've just enough the biggest acquisition of the year. so why has pfizer and allergan wallin so much. so much. we will be exploring that next. ♪

jonathon: good morning from the city of london. i'm jonathan ferro. 42 minutes into the session.

let us get up to speed. by one full percentage point from leading the losses, travel and leisure down almost 2% on the session. the ftse here in london up by 54 points, down by 9/10 of 1%. similar in the dax. top market stories this morning. other top to the stories. russell has extended its highest level of terror alert into next planwarning i.s. terrace to attack highly populated areas. metros will be open tomorrow. one of the 16 people arrested has been charged in connection with the paris attacks. meanwhile, france's president travels to meet with president obama to push a knitting

together of assistance between u.s. and russia. the u.s. has refused military corporation with russia. stakes in raised pharmaceuticals in a series of transactions in october. the move underlined his commitment to the embattled drugmaker, valiant raised stock. some other news we should discuss. hillary clinton has criticized billion dollar merger between pfizer and allergan as an abuse of tax loopholes. the combined company will be domiciled in ireland where corporations taxes are less than half of the u.s. she released a statement saying that the u.s. merger will leave u.s. taxpayers to hold the bag. stocks of allergan and pfizer

are down sharply. let us look at why the director --let us look at this with the director of research. a hugeory is about merger. some investors think it will not go through. sam: part of the discussion is about the political backlash. i do not think anyone really expected otherwise. it would be odd for any l edition to say it was a great deal. we know that the u.s. has been battling with this in version issue and what they need to do with it. that should not have been a surprise. what is surprising in the announcement yesterday was that some of the little details -- according to our calculations, this deal is unlikely to be accretive in terms of earnings. if it was not for the share buybacks. they need to share buybacks to

make the deal agreed it. that is not the best place to be. this is all about increasing the bottom line and the cash flow. perhaps, we should be a little bit more magnanimous. jonathon: the bottom line, in some of your research, the synergies, they may be lower than expected. is that also a big disappointment? is a surprise. the rule of thumb is when a company combines them the two opportunity expenses, you should expect a 10% cut on that. these guys have gone for half of that. it could be that pfizer is lowballing that number to get on theal plus points other hand, it could be that there really are not any overlap that lend themselves to that. because of the lack of synergies, is why we expect they need more of these share buybacks. jonathon: the bottom line from

hillary clinton. the idea that this abuse of tax loopholes, close them now. sam: especially in this case. the structure is that allergan is buying pfizer. it is obvious that pfizer is the main player here. but, from a financial -- i do notposition know about the legal responsibilities here. you're right. they have got to do something. rather than getting in the way of deals, think about the way to allow companies to bring their money back into the u.s. market, that moved in dollar-lira shifts much higher. ryan chilcote can break it down for us. ryan: we're getting news from the turkish presidents office, that turkey has shot down a russian jet in syria and skies.

the concern from a geopolitical perspective is that this is the first incident we have of a nato country, turkey is a nato member, shooting down a russian playing in. skies. there is a lot of concern that this could happen at some point. united states working together with russia to make sure -- the conflicting. it appears the two pilots of this russian aircraft had enough time to eject before the plane was shot down. her has been at least one incident of turkey shooting down what appeared to be a russian drone but this would be the first man playing -- manned p lane. the concern is how will russian respond and what has happened to those highlights who are in syrian territory. of thee in the territory

turkmen. caret -- turkey has been very annoyed with russia. very publicly, they warned the russians against bombing this area populated by ethnic turkmen . we will have to watch this. this is of great concern. it is fair to say that it would have been a larger concern from a geopolitical market perspective has the pilot still been on board in that plane when it was shot down. jonathon: we see the knee-jerk reaction in the fx market. with the u.k. right here. thinking about more military intervention, strikes in syria. there were always concerns about accidents. there is so much going on in various parts of the country. does this complicate things even more? ryan: it does complicate things. theyeason why turkey says shot this plane down was because it violated its airspace. there are an awful lot of

aircraft up there. --t a must the coalition amongst the coalition. there is a huge possibility for some kind of conflict in the skies. having said that, russia, as it tries to encourage nato countries to work with the in syria come is not interested in any kind of conflict. that is why i think it is unlikely that we will see this escalate into a serious geopolitical incident -- as you might expect. we will have to see what the russians say. what we know it this point is that that aircraft did not have any pilots in it when it was shot down. thank you for breaking it down. much more detail on that story as we get it. the fx market, you see the knee-jerk reaction. dollar-turkish lira pushing higher.

stronger by about 7/10 of 1%. up next, he testifies. the bank of england governor testifies before parliament. we look ahead. ♪

jonathon: good morning and welcome back to on the move, i am jonathan ferro. live from the city of london. here is what you know. german business sentiment in november's numbers.

the gauge fell for the first time in four months. we get the final reading of u.s. expected to have expanded at a faster rate than initially forecasted. a previously reported 1.5% increase. before we get to what is going to happen later on in london, i want to get the thoughts of manus cranny on what is happening over in syria. we have exacerbated that move lower. there is also a move in the turkish lira. an accidental, you assume, or an incident with the russian jet being down by turkey. -- being downed by turkey. we will see accidents because the airstrikes are becoming so messy. any ofwe have yet to get the details with regard to what happens.

what happens in a coalition situation is a clear identification. we will be able to discuss it with more authority. what it does say is that there are serious tensions between the members who are trying to establish a coalition. this is one of those incidents that i think that the turks had already warned the russians with regard to airstrikes in that area. it is tied to that. jonathon: here in london. the bank of governor testifying about the inflation report. richard jones, what are you expecting from that? richard: i don't think it can be. they will not be over the moon the pound is 2.5% stronger than the euro than it was directly after the uri presentation on the sixth of november on super thursday. it is the old catch-22.

i don't think they want to be pushing back to much. a little bit. but not too much. her fear that they laid a rocket under the pound. jonathon: the underlying economy is doing ok. the ecb set to do more. the fed may open up the door for the bank to do something. across the channel from the ecb is doing so more and a bank of england sensitive to whatever the pound dust, their hands are tied. : it is a buffer. it is caught between a rock and a hard place. what is interesting is that anyone thinks that mark carney will go before the treasury select committee -- yellen is -- asizing would mark carney been really go in front of the treasury select committee and pushed a more hawkish message in that case?

i think not. strangely whene i turned my eyes up and talked about the u.k. recovery. i challenge that the u.k. is in a recovery mode. i think he will be in a slowdown. jonathon: we actually have to leave it there. gentlemen, thank you very much. much much more news on the downed russian jet at the -syrian border. the russian jet ignored repeated warnings according to the turkish presidency. much more news on that significant development in the last 20 minutes or so. we want to talk markets, you know where i am. session lows this morning. wordurkish lira though, a lira.eaker turkish

best of luck for the rest of your day. ♪

brussels extends its terror warnings. schools on the subway remain close. manus: bhp touches a 10-year low as commodity crunch bites. francine: 3/4 of investors are inting on a fed rate hike december. be. third quarter gdp set to revised today. welcome to "the pulse" live from london. adding breaking news in terms of -- the big newsin